### United States

Department of Agriculture Animal and Plant Health Inspection Service August 2014 **Initial Regulatory Flexibility Analysis**

**Proposed Rule**  **APHIS 2012 -**  **0049 RIN 0579**  **- AE00**  **Exportation of Live Animals, Hatching Eggs, and Animal Germplasm from the United**  **States**

Policy & Program Development Policy Analysis & Developmenti



### Summary This proposed rule would amend 9 CFR part 91, which contains requirements for the inspection and handling of live stock (cattle, horses, captive cervids, sheep, goats, and swine) to be exported from the United States. Among other things, the proposed rule would remove some prescriptive requirements applicable to livestock , either completel y or b y replacing them with performance standards, and would make other adjustments in inspection and handling requirements to assist exporters. These changes would provide APHIS and exporters more flexibility i n arranging for the export of livestock from the United States while continuing to ensure the animals’ health and welfare. The proposed rule would also add requirements for individual identification of livestock intended for export and use of methods and laboratories approved b y APHIS when livestock must be tested for certain diseases . The proposed rule would also set forth minimum requirements for the information that must be provided on export certificates for livestock and for non

- livestock animals, h atching eggs, and animal germplasm (when such certificates are required b y the importing country) . These changes would help ensure that all live animals, hatching eggs, and animal germplasm exported from the United States meet the health requirements of the countries to which they are destined and that APHI S has assurances regarding their health and welfare at the time of export

. E ntities directly

affected by

this rule would include exporters of live animals, hatching eggs, and animal germplasm . While we do not know the size distribution of these exporters, we expect that the majority are small by S mall B usiness A dministration standards, given the prevalence of small entities among livestock producers. Operators of e xport inspection facilities, export iso lation facilities within 28 hours driving distance from a port of embarkation , and oceanii

vessels would also be directly affected. These industries are also largel y composed of small businesses. T he provisions of the proposed rule would facilitat e the export process for affected parties

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**Table of Contents** Summary

................................ ................................ ................................ .............................. i Introduction

................................ ................................ ................................ ......................... 1 Reasons Action is Being Considered

................................ ................................ .................. 2 Objectives of and Legal Basis for the Rule

................................ ................................ ........ 3 Potentially

Affected Small Entities

................................ ................................ ..................... 4 Projected Reporting, Recordkeeping, and Other Compliance Requirements

..................... 6 Exporters
................................ ................................ ................................ ......................... 7 Export Inspection Facilities, Export I solation Facilities, and Ocean Vessels

............... 10 Duplication, Overlap, or Conflict with Existing Rules and Regulations

.......................... 16 Alternatives to minimize Significant Economic Impacts of the Rule

............................... 161



### Introduction The Regulatory

Flexibility

Act requires agencies to evaluate the potential effects of their proposed and final rules on small businesses, small organizations and small governmental jurisdictions. This initial regulatory flexibility

analy sis describes exp ected impacts of this proposed rule on small entities, as required b y section 603 of the Act. This proposed rule would amend the regulations pertaining to the exportation of livestock from the United States. Among other things, it would remove most of the requirements for export health certifications, tests, and treatments from the regulations, a nd instead would direct importers to follow the requirements of the importing country regarding such processes and procedures ; allow pre - export inspection of livestock to be conducted at facilities other than the export inspection facility associated with the port of embarkation , under certain circumstances; and replace specific standards for export inspection facilities and ocean vessels with performance standards. These changes would provide exporters and APHI S with more flexibility in arranging for the export of livestock from the United States while continuing to ensure the health and welfare of the livestock. The proposed rule would also require thatlivestock exported from the United States be individually

identified in accordance with APHI S’ animal disease traceability regulations and the requirements of the importing country and that any testing of livestock for P rogram diseases be conducted using methods and laboratories approved by APHIS. Additionally , if a country requires an export health certi ficate for any animal other than livestock, including pets, or for any hatching eggs or animal germplasm, we propose to require that the animal, hatching eggs, or animal germplasm have such export health certificate to be eligible for export from the Unite d States. Th ese change s would help ensure that all live animals, hatching eggs, and animal2

germplasm exported from the United States meet the health requirements of the countries to which they

are destined. 

### Reasons Action is Being Considered The regulati ons regarding the export of livestock from the United States have not been substantively

amended for many

years. Some provisions, such as the requirement that all livestock intended for export by air or sea must be inspected prior to embarkation at an exp ort inspection facility

a ssociated with the port of embarkation, sometimes interfere with exports , particularl y when there are large shipments and tight shipping deadlines. Other requirements, such as diagnostic testing and certification s require d for specific species, regardless of the country of destination, may

not be necessary in order to meet the health requirements of an importing country , or in order for APHIS to have assurances regarding the health and welfare of livestock at the time of e xport
. Still other requirements, such as the minimum information that must be included on an export health certificate, should be updated and clarified to reflect current Agency practices and policies. APHI S is proposing a number of changes that would r emove unnecessary or overl y prescriptive requirements and give exporters and APHI S more options for inspecting and handling livestock intended for export. The proposed changes would continue to ensure the health and welfare of the animals and would help e nsure th at all animals, hatching eggs, and animal germplasm exported from the United States meet the import health requirements of countries to which they

are destined. The importance of the regulatory revisions included in this proposed rule is evident gi ven recent significant increases in the quantity and value of livestock exported by the United States. In 2009, the United States exported about 58,000 head of cattle, valued at about $59 million. In3

201 2 , U.S. cattle exports totaled over 19 1 , 000 head an d were valued at more than $ 403 million. Russia sharply

increased imports of U.S. cattle during 2012, importing more than 89,000 head valued at more than $ 262 million, compared to about 37 , 5 00 head valued at $ 93 million during 2011. Responding to this surge in demand, APHIS approved 7 temporary export inspection facilities in 2012 to supplement the work done at permanent facilities, reduce the distance cattle travel before export, and help exporters meet their shipping deadlines. In 2013, U.S. cattle exp orts totaled over 159,000 head and were valued at more than $278 million. The proposed rule would help ensure that expanding livestock exports by the United States are facilitated by the animal health regulations

. 

### Objectives of and Legal Basis for the R **ule** The objective of the proposed rule is to remove or modify certain export requirements such as those described above and thereb y facilitate U.S. exports of live animals, hatching eggs, and animal germplasm

. The changes and expected effects are described below under the section on compliance requirements. The legal basis for the proposed rule is the Animal Health Protection Act ( AHPA, 7 U.S.C. 8301 et seq.) , which states that the Secretary of Agriculture may prohibit or restrict the exportation of any

animal, article, or means of conveyance if the Secretary determines that the prohibition or restriction is necessary to prevent the dissemination of an y pest or disease of livestock from or within the United States . The AHPA also authorizes the Secretary to prohibit the exportation of any

livestock if the Secretary determines that the livestock is unfit to be moved , and authorizes the Secretary to prohibit the use of an y m eans of conveyance in connection with th e exportation of livestock if the Secretary determines that the prohibition or restriction is necessary

because the means of conveyance has not been maintained in a clean and4

sanitary condition or does not have accommodations for the safe and proper moveme nt and humane treatment of livestock. APHI S has promulgate d regulations in 9 CFR part 91 governing the inspection and handling of cattle, horses, captive cervids, sheep, goats, and swine intended for export from the United States. The Secretary has determined that certain Part 91 regulations can be safel y removed or modified to facilitate exports

. 

### Potentially Affected Smal **l Entities**
E ntities directly

affected by

this ru le would include exporters of live animals, hatching eggs, and animal germplasm. While we do not know the size distribution of these exporters, we expect that the majority are small by S mall B usiness A dministration (SBA) standards, given the prevalence of small entities among livestock producers. O perators of export inspection facilities , export isolation facilities located within 28 hours driving distance of a port of embarkation , and ocean vessels would also be directl y affected

. These industries are also largel y composed of small businesses. According to SBA size standards and using the North America Industry Classification Sy stem, operations with not more than $750,000 in annual sales are considered small entities for beef cattle ranchin g and farming (NAICS 112111), dairy cattle and milk production (NAICS 112 120), cervid farm ing ( included in NAICS 1129 90 ), sheep and goat farming (NAI CS 1124), and hog and pig farming (NAICS 112210) . The small

- entity standard for chicken egg production (NAICS 112310) is annual receipts of not more than $12.5 million

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In 20 12 , 9 3 percent of cattle and calf farms and 71 percent of dairy farms generated less than $500,0 00 in cash receipts , and 3.6 percent of beef farms and about 15 percent of dairy farms generated $1 million or more. 1 In 2012 , there were 2,465 farms categorized within NAI CS 112990, a classification composed of establishments primarily engaged in raising captive cervids,. T he average market value of agricultural products sold in 2012 was about $ 22,700 , well below the SBA's small

- entit y threshol d. In 2012 , there were 53,754 farms that sold about 3,947,600 lamb and sheep in the United States. Of these, more than 96% of the farms had less than $500,000 in sales, well below the SBA standard for small entities . That same year, over 76 percent of swine operations ( 55,882 farms ) qualified as small entities. In 2012 , there were 3,144 farms primaril y engaged in chicken egg production on a contract basis and about an additional 2,000 operations primarily engaged in organic egg production . The average market value of agricultural products sold by the establishments engaged in organic egg production in 2012 was about $ 77,000 , well below the SBA small

- entit y standard

. The total value of egg production in the U.S. in 2013 was $8.5 billion or $2.7 million per establishment, well below the SBA standard for small entities. 2 Clearly , these agricultural industries are primaril y composed of small entities, and it is likely that man y if not most of the operations that export live animals, hatching eggs , or animal germplasm are small as well.

1 2012 Census of Agriculture , USDA NASS

. This census is also the source of information on av erage sales for the other categories of livestock producers included in this section. http://www.agcensus.usda.gov/Publications/2012/#full_report

2 http://www.uspoultry.org/economic_data/6

Turning to wholesale businesses , the small

- entity standard for export ers of animal germplasm or hatching eggs ( included among industries categorized in NAICS 424590 and 424440, respectivel y) is establishments with not more than 100 emplo yees. The average number of employees per establishment for industries with in these NAICS codes in 2007 (most recent ye ar for which data are available) was fewer than 9 and fewer than 2 3 , respectivel y, well below the small

- entity

standard. 3 For businesses that operate ocean vessels used to transport live animals ( included within NAI CS 483111), the small

- entity standard is not more than 500 employees. In2007, there was an average of 33 emplo yees per establishme nt in this industry classification , far below the small

entity standard. Lastl y, f or animal export facilities and animal isolation facilities (included in NAI CS 488999), the small

- entity standard is annual receipts of not more than $7 million. T he average
revenue of establishments in this industry classification in 2007 was $704,000, well below the small

- entity threshold

. It is apparent that the majority of entities that would be affected b y the proposed rule are likely to be small. However, w e welc ome public comment that would allow us to better understand the representation of small entit ies among these operations

. 

### Projected Reporting, Recordkeeping, and Other Compliance **Requirements** Reporting and recordkeeping requirements associated with the proposed rule are discussed in the rule under the heading "Paperwork Reduction Act." This section is devoted to a

3 Statistics on the average size of establishments described in this and following paragraph s are taken from www.naics.com/naicsfiles/Size_Standards_Tables2013.pdf7

discussion of proposed changes in compliance requirements and expected effects for (i) exporters and (ii) export inspection facilities , expo rt isolation facilities, and ocean vessels

. P rovisions of the proposed rule are expected to promote export opportunities for the U.S. livestock , hatching egg, and animal germplasm industries by facilitating the export process

. The provisions would also underscore for our trading partners that APHIS uses its regulatory authority to ensure the health and humane treatment of live animals, hatching eggs, and animal germplasm imported from the United States. **Exporters**

 Export health certificates for livestock would only be required to contain the minimum information that is required b y the importing country and/or that is necessary for APHI S to have assurances regarding the health and welfare of the animals destined for export

. This change should res ult in time and cost savings for many importers.

 If a country

requires tests for any

diseases for which APHI S has a control or eradication program ( P rogram disease), the tests would have to be conducted using methods and laboratories approved b y APHIS. Th is change would assure importing countries that tests for all P rogram diseases, not just brucellosis (as is currently the case), are conducted in accordance with APHIS requirements . This provision is expected to strengthen the confidence of importers of U .S. live animals, hatching eggs, and animal germplasm that the commodities are in good health

.

 Animals other than livestock , such as pets, would have to have export health certificates when required by the importing country . The purpose of including this requirement in our regulations is to provide APHIS with a basis for collaboration with8 animal health officials of other countries when prob lems arise with shipments of such animals. The cost to exporters of non - livestock animals of APHI S requiring export health certificates in such instances is expected to be minimal , at most, since such exporters currentl y have to obtain certificates in order to meet the requirements of the importing country . The requirement would merely codify long

- standing practices.

 If an export health certificate is issued and endorsed electronicall y, an original, signed export health certificate would not have to accompany animals to the port of embarkation or land border port. This change would streamline movement requirements if, as we anticipate happening in the future, export health certificates can be issued and endorsed electronicall y and APHI S representativ es at ports have electronic access to those export health certificates.

 The export of animals, hatching eggs, or germplasm that are under Federal, State, or local quarantine or movement restrictions would be prohibited unless the importing country issues an import permit or other written instruction allowing the animal or other commodity

to be imported , and APHIS concurs with the export . This change is also expected to have little, if an y, effect on exporters, as export health certificates for livestock mu st certify

that the issuing veterinarian inspected the animals and found them to be health y and free of evidence of communicable disease and from exposure to communicable disease.

 Pre
- export i nspection s of livestock would be allowed to take place at facilities other than the export inspection facility associated with the port of embarkation under certain circumstances

. Specificall y, subject to certain conditions, APHI S would authorize pre

- export inspections at export isolation facilities and export i nspection9 facilities other than the export inspection facility associated with the port of embarkation. Currently , many countries require livestock for export to be kept from other animals for a period of time before export. Facilities used for this purp ose may be distant from the port of embarkation. Allowing pre

- export inspections at export isolation facilities not more than 28 hours driving distance from the port of embarkation would facilitate export of large shipments of livestock that cannot be
acc ommodated at export inspection facilities at ports, and would provide flexibility in other situations. It would expedite the export process and lessen transportation , labor, and rental costs in some instances, particularl y for large shipments of animals. Similarly , some export inspection facilities are more equipped, in terms of personnel and resources, to handle large lots of animals than other inspection facilities. Allowing use of the export inspection facility most suited to the orderly export of liv estock would also facilitate exports.

 Livestock currently

are required to receive 5 hour s of rest, feed, and water prior to movement to an aircraft or ocean vessel for export , with limited exceptions for livestock that will arrive in the importing country within a certain period of time

. We would reduce the minimum rest period from 5 hours to 2 hours, although an inspector could increase the period up to 5 hours at his or her discretion and based on a determination that more rest is necessary in order to h ave assurances that the animals are fit to travel prior to loading

. We would also remove any exemptions to this requirement. Th ese change s would modify the 5
- hour requirement while still ensuring the animals’ care. The average cost of feed per day at an export inspection10 facility is about $1.50 per head. More flexible pre

- embarkation rest and feeding requirements sh ould result in cost savings for most exporters.

 Pre
- export inspection could occur within 48 hours prior to export rather than 24 hours as currentl y required . This change would ease export scheduling. Italso may reduce the demand for inspections outside of normal business hours and thereb y decrease overtime costs

.

 The owner or owner’s agent of an y livestock rejected as unfit to travel would be required to make effective and humane arrangements for the handling of the animal. This proposed requirement would give notice to owners and their agents that it is their
res ponsibility

to take appropriate care of animals that are judged unfit t o travel upon arrival at a port . It is expected to be accepted by exporters as a reasonable requirement. **Export Inspection Facilities, Export Isolation Facilities, and**  **Ocean Vessels** 

 As mentioned , many

countries require livestock intended for export to be kept isolated from other animals for a period of time before export. After the isolation period ends, if the livestock will be exported by air or sea, they

must be shipped to an export inspection facility associated with the port of embarkation for pre - export inspection by

APHIS. The p roposed rule would allow pre - export inspection at an export isolation facility located 28 hours driving distance or less from the port of embarkation whe n the exporter can demonstrate to APHI S’ satisfaction that the livestock would suffer undue hardship if they had to be transported to an export inspection facility , when the distance from the export isolation facility to the port of embarkation is significantly less than the distance from the export isolation facility to11 the export inspection facility associated with the port of embarkation, when inspection at the exp ort isolation facility would be a more efficient use of APHI S resources, or for other reasons acceptable to the Administrator. The Administrator’s decision to allow inspection at an export isolation facility as an alternative to inspection at an export in spection facility would be contingent upon APHIS having veterinarians available to provide services at that location. Approval would also be contingent upon the Administrator determining that the facility had space, lighting, and humane means of handling animals sufficient for APHIS veterinarians to safel y conduct required inspections. Similarly , the proposed rule would allow pre - export inspection at an export inspection facility

other than the export inspection facility associated with the port of embark ation when the exporter can demonstrate to APHI S’ satisfaction that the livestock would suffer undue hardship if they had to be transported to the export inspection facility

associated with the port of embarkation, when inspection at this different export inspection facility would be a more efficient use of APHI S resources, or for other reasons acceptable to the Administrator. Th ese change s would facilitate the export of large shipments of livestock that may be difficult to accommodate at a particular exp ort inspection facility and would provide flexibility

in other situations. Such situations could include a temporary inability by APHI S to staff a particular export inspection facility, or a situation where an APHI S veterinarian is at or near an export is olation facility for another purpose and conducting the pre - export inspection there would alleviate the necessity to load,12 transport, and unload the livestock to transport them to an export inspection facility for APHIS inspection.

 P rescriptive requireme nts in the regulations for export inspection facilities and ocean vessels would be replaced in many instances by performance standards , and guidance for meeting the performance standards would be placed on the APHI S W eb site. Ina Program Handbook, APHI S would provide guidance on how facilities can meet APHI S’ requirement to have adequate measures in place to protect the livestock in a facility from exposure to animals of different disease statuses and fomites during the isolation period. The measures des cribed in the Program Handbook would be one way , but not the only

way , to compl y with the requirement. The amended regulations would contain the following performance standard:

“ Facilities must be constructed, equipped, and managed in a manner approved by the Administrator to prevent the transmission of disease to and from livestock in the facility , provide for the safe and humane handling and restraint of livestock, and provide sufficient space , offices, and lighting for APHI S veterinarians to safel y
co nduct required inspections of livestock and related business. ” Performance standards such as this would enable operators of facilities to choose the most economical means of meeting regulatory requirements.

 APHI S is making the draft Program Handbook avai lable for comment along with th e proposed rule . The Handbook includes specific standards for meeting regulatory requirements. In addition, the amended regulations would allow for facilities to request approval of alternative way s to meet the requirements

. Placing the performance guidance on the APHI S W eb site would aid the facilities and vessels in13 complying with the standards , and allowing for alternative way s to meet the standards could result in cost savings for the affected parties

.

 Allowing inspecti ons to take place at export isolation facilities located 28 hours driving distance or less from the port of embarkation would increase business opportunities for these facilities. There may result a decrease in demand for the services of export inspection facilities, but the impact is expected to be limited. The latter facilities would continue to handle most exports, especiall y smaller shipments of animals. Currentl y there are 56 privatel y owned export inspection facilities approved b y the Administrator to service 34 ports.

 APHI S is proposing to allow the Administrator to temporaril y approve ports without export inspection facilities under certain circumstances. Specifically , such ports could be approved for a specific shipment of livestock when the Administrator has authorized pre - export inspection of livestock to be conducted at an export isolation facility or an export inspection facilit y associated with a different port of embarkation . This change would allow temporary use of ports that do not have export inspection facilities for specific shipments of livestock. Such ports would not be listed with designated ports of embarkation on APHI S’ import

- export Web site. Their use would be limited to the specific shipment(s) for which they were approved by the Administrator. Having this export option available would not only promote the care of the animals in those instances when a temporary port of embarkation is determined to be appropriate, such as when the animals would suffer undue hardship if they had to be transported to another port , but would also result in transport cost savings for the exporter

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 C urrent requirement s that owners, masters, or operators of ocean vessels and captains of aircraft must refuse for transportation an y livestock that is unfit to withstand the rigors of such transportation would remain , with one change : Rather than require that an APHI S veterinarian j udge whether an animal is fit to travel , w e p ropose to allow an APHI S representative to make that decision

. A list of conditions that may make livestock unfit for travel would be added to the regulations. The list is not intended to be all inclusive, but should cover the most common situations.

 AP HI S is also proposing to require the owner or operator of any ocean vessel used to export livestock from the United States to file a report with APHI S upon completion of the voyage. This report would document the number of each species of livestock loaded for transport and discharged at the foreign destination; the number of each species that died during transport or unloading, if any, and an explanation of any mortalities. Additionally , the report would have to document an y failure of a major life support sy stem for livestock during the voyage, including, but not limited to, sy stems for providing feed and water, ventilation sy stems, and livestock waste removal s ys tems. An y s uch failure would have to be documented, regardless of the duration or whether th e failure resulted in an y harm to the livestock. We propose to require that the report be submitted within 5 business day s after completion of the voyage. Additionally , if an ocean vessel used to export livestock experiences any failure of a major life s upport sy stem for livestock during the voyage, we propose to require that the owner or operator of the ocean vessel notify APHIS immediately

by telephone, facsimile, or other electronic means. Contact numbers and addresses, as well as an optional f

orm for completing the report, would be available in the Program15 Handbook

. There are currently

no r equirements for owners or operator s of ocean vessels to report livestock deaths or serious sy stem failures on ocean vessels that could affect the health of an y livestock transported. Having this information would allow APHI S to better determine whether a given vessel meets our performance standards or whether an y of our guidance for meeting performance standards should be adjusted. Requiring that APHIS be notif ied immediately

of any major sy stem failures would alert APHIS to the potential need for additional food or other resources for the livestock, or a potential stop at another port. APHIS would also be able to notify animal health officials in the country o f destination about any

expected delay s or animal hea lth issues they may have to deal with as a result of the s ys tem failures. In the absence of these requirements, APHI S may not learn of problems affecting animals during a vo ya ge, or may be forced to scr amble to make last minute arrangements in the event of a problem. We propose that failure to provide timely reports as required could result in APHI S disapproving future livestock shipments on that vessel or b y that owner or operator

. The cost of reporti ng upon voyage completion is expected to be minimal.

 We are proposing to retain the requirements for cleaning and disinfection of vessels and aircraft . We are, however, proposing to remove references to specific disinfectants from the regulations and, ins tead, to list approved disinfectants on APHI S’ Web site. Other disinfectants could be approved by the Administrator u

pon determin ation of their effective ness and, if c hemical disinfectant s , their registration or exempt ion for the specified use b y the Envi ronmental Protection Agency

. This16 change would potentiall y provide carriers with a broader choice of disinfectants and possible cost savings.



### Duplication, Overlap, or Conflict with Existing Rules and **Regulations**

APHI S has not identified any duplicati on, overlap, or conflict of the proposed rule with other Federal rules. 

### Alternatives to **minimize Significant Economic Impacts of the**  **Rule**

We expect effects of the proposed rule for small entities to be positive, as described above in the discussion of compliance requirements, and therefore have not identified alternatives to minimize these effects

.